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Edited version of private advice
Authorisation Number: 1051566017886
Date of advice: 21 August 2019
Ruling
Subject: Non-commercial loss
Question
Will the Commissioner exercise the discretion in paragraph 35-55(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your business in the calculation of your taxable income for the 2017 - 18 financial years?
Answer
Yes
This ruling applies for the following periods:
Year ending 30 June 2017
Year ending 30 June 2018
The scheme commences on:
1 July 2017
Relevant facts and circumstances
You and your spouse purchased an existing boutique vineyard.
The vineyard did not come with any of the existing stock or harvest.
Harvest is in January/February each year
Due to the grape varieties grown on the vineyard, most of the wines require substantial aging time in barrels.
Comprehensive business plan shows a profit in the year ending 30 June 2019
Relevant legislative provisions
Income Tax Assessment Act 1997 section 35-10
Income Tax Assessment Act 1997 subsection 35-10(2E)
Income Tax Assessment Act 1997 section 35-30
Income Tax Assessment Act 1997 Section 35-55
Reasons for decision
Having regard to your full circumstances, it is accepted that it is in the nature of the business activity that has prevented you making a tax profit. It is also accepted that you will make a tax profit within the commercially viable period for your industry. Consequently the Commissioner will exercise his discretion for the 2016-17 to 2017-18 financial years.
For more information on non-commercial losses, please visit ato.gov.au and search quick code QC 33774.
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